Flight training provider CAE is busy "ingesting" its latest acquisition, Bombardier's Business Aviation Training (BAT) arm. However, it is open to additional takeover opportunities as it continues to expand its geographical footprint, the company's group president of civil aviation training solutions, Nick Leontidis, told Flight Evening News in an exclusive interview ahead of EBACE.
CAE completed its $645 million (£498 million) acquisition of BAT in March, bringing 12 new Bombardier business aviation full-flight simulators – located in Dallas, Texas and Montreal, Canada – into its training network, and increasing to 29 the number of Bombardier business aircraft simulators operated by CAE.
The Bombardier BAT business includes full-flight simulators and training devices covering the Learjet, Challenger and Global product lines, including the latest large-cabin Global 5500, 6500 and 7500 business jets.
When the acquisition was first announced in November, CAE said it would expand its position in the largest and fastest-growing segment of the business aviation training market, and provide "high single-digit percentage earnings accretion".
CAE president Marc Parent described the transaction as a "win-win for both companies", noting that "market fundamentals in business aviation are strong and the business we are acquiring is well-supported by a large installed base".
Bombardier's former training unit had "two objectives" that will now be woven into CAE's business aviation division: training for customers of new aircraft and training for clients who were part of its existing customer portfolio, says Leontidis.
"In business aviation, the name of the game is to provide a broad offering to our clients," says Leontidis, adding that "some of the training programmes Bombardier offered were not in the CAE portfolio, including the Global 7500".
CAE plans to expand and develop the unit as and when Bombardier adds different business aircraft variants.
"Bombardier delivers a significant amount of business aircraft every year and with that comes the need for capacity. Our plans over the next few years [include] expansion within that capacity," says Leontidis.
Further acquisitions are possible if the right opportunities arise.
"We're ingesting Bombardier at the moment, but we're always open to new acquisitions," says Leontidis. "If there's an opportunity to look at another acquisition, we would be happy to look at it."
CAE's "big locations" for training outside Canada include Dallas, Morristown in New Jersey, Burgess Hill in the UK, Amsterdam, Dubai and Abu Dhabi, as well as a small operation in Shanghai. The company plans to further expand these existing facilities, but it also has an eye on opening training centres in other locations.
"We do plan to continue to grow these operations because there are synergies for our customers and for us to offer multiple training programmes in the same location," says Leontidis, adding that CAE is also "planning to expand our geographical footprint". He names Asia-Pacific and the USA as two possible areas for expansion.
CAE will "continue to invest" in its Dubai training centre, which it operates through a joint-venture agreement with Emirates. Leontidis says the Dubai facility and the centre in Abu Dhabi, which is run "as one operation" alongside Dubai, are well located to serve Asian, African and European customers.
The Canadian firm now supports "most [business aircraft] platforms out there", with the exception of "a couple" of older types. It offers training support on "literally all" the Dassault, Gulfstream and Bombardier business jet families, and has a joint venture agreement with Embraer for Phenom training.
CAE acquired BAT at a time when demand for business aviation pilots looks set to rise significantly.
There are currently about 55,000 active business jet pilots in the world, but a combination of growing demand, high retirement rates and defections to fill vacancies at commercial airlines will see a need for 50,000 new recruits over the next decade, says Leontidis. Training companies are having to "get creative" to ensure that a sufficient number of trainee pilots of a high enough calibre to complete their instruction are coming through the pipeline.
"In the corporate aviation world, the demographic is really the issue – there's a higher retirement [rate]. Pilots are also moving to commercial [airlines] to fill that demand. This movement creates demand for new [business aviation] pilots," says Leontidis.
If demand for commercial pilots continues to soar, this will "create more stress on business aviation" and "put a strain" on the system.
"We are using a lot of creative thinking to build the pipeline of pilots that come through," says Leontidis, noting that the business aviation sector is increasingly looking atab initioprogrammes.
Pointing to Rise, CAE's data-driven training system, Leontidis says that CAE is "investing lots of money not only in simulators, but also in technology". He says the system, which leverages big data analytics to make training more efficient, "allows management to better train individuals".
When it comes to the cost of training to become a pilot, Leontidis says it is comparable to other higher-education programmes in many countries, and financial support is available to trainees. In the USA, for example, pilot training is available "at a fraction of the cost of going to a top school", although in some countries this is not always the case.
"In most parts of the world, getting this type of education is not that different to getting many others. The key here is the assessment programme, so when you bring people in, you know they are going to complete their studies," he notes.
There is "no global solution" to the issue of looming pilot shortages, and issues need to be "tackled one at a time".